DBS Group Holdings Ltd., the largest lender in Southeast Asia, is advocating for a more realistic approach to reducing emissions from major polluters. Instead of imposing unrealistic demands for reforms, the bank believes that these companies need support to develop credible plans to curb their emissions. This is particularly relevant in the Asia-Pacific region, where coal still accounts for nearly half of the total energy supply and industries such as shipping and steel-making are struggling to decarbonize quickly.
According to Helge Muenkel, DBS’s chief sustainability officer, giving companies “breathing space” to develop transition plans is essential. The bank has warned that emissions tied to its customers may rise in the short term, but it is working to direct more funding towards supporting the early retirement of coal power plants and developing supply chains for critical minerals and green technology.
DBS has made significant commitments to sustainable financing, increasing its target to $69 billion by the end of 2024. The bank plans to hold its customers accountable for their transition efforts and will consider cutting ties with those who fail to demonstrate a willingness to move towards more sustainable practices. Muenkel emphasized that the bank will engage with customers to understand their transition plans and will only consider ending relationships with those who are not making a genuine effort to reduce their emissions.
Despite criticism from some quarters, DBS has chosen to remain a member of the Net-Zero Banking Alliance, a finance sector climate group that aims to promote collective action and collaboration on climate issues. The bank believes that this platform has been helpful in fostering collaboration and driving progress towards a more sustainable future. By taking a more nuanced and supportive approach, DBS aims to help major polluters transition towards a lower-carbon economy, rather than simply imposing unrealistic demands for reform.